"They did social media for us, they did a bit of work on the last campaign and so they're doing work for us now, helping build up our stock footage and stuff," she told NZME.

In the Labour Party's 2017 declaration of donations and loans, Augusto Limited is shown to have donated $18,274.81 to the party between August 1 and September 22, 2017 - the same time the advertising agency began working on the party's election campaign.

Ms Ardern's office said the photographers were also important as it was impossible for media to get to all of her events due to the Prime Minister's busy schedule.

Prime Ministers typically have office staffers take their photos, but Ms Ardern hired a crew of three from Augusto's New York office. She said their fee would be paid from the taxpayer-funded Labour leader's budget.

While her office said that is within the rules, National's deputy leader Paula Bennett has come out swinging, saying it is a breach of campaign spending rules.

"What stands out here is that the Prime Minister has said she is using her leader's budget and the footage will be used for political campaigning," she said.

"This is against the rules and I would urge the Prime Minister to clarify whether taxpayers' funds will be used for the Labour Party to campaign," NZME reports.

Ms Ardern didn't know how much the fee was for the advertising agency's work, but her office has insisted it would have been cheaper than bringing a photographer over from Aotearoa.

"We considered that but it worked out cheaper to use someone who was already in New York, this option saved the taxpayer money," Ms Ardern's office said.

The ACT Party tweeted, "Jacinda Ardern is obsessed with her own image and the taxpayer is picking up the bill."

Former Prime Minister John Key once planned to settle a defamation case using his leader's budget, but backed down after public outcry and advice from Parliamentary Services. The same fund was used to settle an employment dispute in National MP Todd Barclay's office in 2017.